The News quoted a senior government official as saying that both sides would review the gas pricing mechanism when there is a change in the co-relation between Japan LNG and Japan crude oil mix.

A high-powered Pakistani delegation, headed by Secretary Ministry of Petroleum and Natural Resources Furrukh Qayyum, left for Tehran on Tuesday after getting authorization from the Government to seal the gas sales purchase agreement (GSPA) with the Iranian authorities.

“Right now our technical and legal experts are very much there to strike down the landmark gas deal. We are now expecting that both sides will technically finalize the gas deal after marathon and decisive talks in Tehran…” said the official.

The Economic Coordination Committee (ECC), in its October 31 meeting, had constituted a steering committee headed by Minister of Petroleum and Natural Resources Amanullah Khan Jadoon, comprising Advisor to Prime Minister on Finance and Revenue Dr Salman Shah, Deputy Chairman Planning Commission Dr Akram Sheikh and Chairman CBR, Abdullah Yousaf to look into the GSPA document in detail, which the Ministry of Petroleum and Natural Resources had submitted for approval.

“The said steering committee after scrutiny of the GSPA document has given authorization to the Pakistan delegation, which is right now in Tehran to seal the deal,” the official added.

Earlier, Pakistan had reservations on the issue of reviewing the pricing formula as the mechanism which was approved by ECC on April 10, 2007 was linked with the prices of Japan crude cocktail.

“Pakistan was of the view that there was no need to review the price of gas to be imported from Iran under the IP pipeline as the price had been linked with fluctuations in oil prices in Japanese market,” the official said.

“Iran was bent upon introducing a clause in the gas deal for review of gas pricing, keeping in view the change in co-relation between Japan LNG and Japan crude oil mix.

“So, after hectic deliberations among the stakeholders and experts, Pakistan took a decision to entertain the demand of Tehran with a view to ensure the energy security cover to Pakistan, which is facing energy crisis,” he added.

As per the latest agreement, the formula will be reviewed whenever there will be any change in the co-relation between Japan LNG and Japan crude oil mix.

However, the official said, a change in the co-relation between Japan LNG and Japan crude oil mix would not happen unless the world witnesses some big tragedy due to which oil and gas reserves in the world get severely damaged.

Islamabad and Tehran will review the gas pricing in 2015, keeping in view the data of 60 months ranging from 2002 to 2007.

The official said that in case the crude oil price in Japan market stands at 90 dollars per barrel, then the price of gas to be imported from Iran would stand at eight dollars per mmbtu.

However, Pakistan will import gas at an average price of six dollars to 6.5 billion dollars per mmbtu.

He further said that Pakistan has already communicated to Iran that Islamabad stands ready to import five billion cubic feet gas per day through the proposed gas line to make the project more economically viable as India is currently pursuing ‘wait and see’ policy.

Under the earlier proposed 7.3 billion dollars Iran-Pakistan-India (IPI) transnational project, Islamabad was to import 3.15 billion cubic feet (bcf) per day from Iran (1.05 bcf per day under phase 1 and 2.1 bcf under phase II), while India was to import 1.05 bcf per day in phase-I and 3.20 bcf in phase-II.

The official said that in the wake of India’s ‘evasive’ attitude, as Indian experts did not participate in the recently held meeting in Tehran and the ongoing meeting in Islamabad, both Iran and Pakistan have decided to materialize the IP project.

Under the new scenario, he said, the authorities concerned in Islamabad have placed a new offer that they would import five billion cubic feet per day gas through the pipeline having radius of 56 inches. (ANI)